Skip to main content
6:30 am
have indicated desire to be included in the initial marketing of the program. that to me, colleagues, is something that i think is super important, absolutely does it shift the burden onto the puc to do the marketing, as opposed -- and to get people to voluntarily want to be part of the program as opposed to an opt out. i'd love to have a debate with anyone about an opt out and whether that's a real chie choir consumers. we debated last year about the yellow pages. that was a big deal for a lot of people. if we provide consumers the initial ability to indicate they want to be part of it i'm for it. if people want to spend more money like supervisor avalos indicated he wanted to do to buy green energy from sf, we should allow people to do that. but to cores the coerce them int
6:31 am
program to me is the wrong approach and something i can't support. i will offer those amendments and look forward to discussing it further. >> president chiu: supervisor wiener. >> supervisor elsberndwiener. >> supervisor wiener: thank you. i have questions for the puc and for the city attorney. and i will preface this in terms of the amendments offered and it seems like it's the first two that are at issue, since it looks like the the puc is agreeing to the third. to me, i think they're very good arguments on both sides of this, and i know that, you know, there are a lot of people who would like to see this voted up or down, either move forward with the program or we don't move forward with the program and after all the years that the agency has put into this program, i certainly think that they're entitled to know whether the program is important or not. what i don't want to do is send
6:32 am
them back with something passed, and signed into law, that's going to cause them to sort of spin around chasing their tails and ultimately the program doesn't happen because what we've inserted in is a poison pill. i'm not interested in putting any poison pills in here so i have some questions, i'm trying to ferret out whether particularly the second one -- i guess one and two, are poison pills, and also if there are ways that they don't have to be poison pills. so i guess my first question is -- we know that state law requires an opt-out. there's now an amendment that requires, in a way, sort of a preliminary or initial opt-in to show a certain level of support before proceeding. i have -- my question is, for whoever can answer it, whether we are able to do that. to have sort of a -- some form of an opt-in that precedes the
6:33 am
opt-out. >> deputy city attorney teresa mueller. supervisor, it's absolutely right that state law prohibits an opt-in for this program and requires opt-out. and our view of this requirement is that it's a requirement for how the program will be marketed and rolled out in the early phases of the program. because the program, that is before you, provides for a phased implementation, this provision simply says, in the beginning phases, the program will be offered to people who have indicated their interest in being included in that initial
6:34 am
group to be marketed to. they still would be required to opt out, ultimately, or they would be in the program. and ultimately, the program would have to be offered to every residential customer in san francisco, because that's what state law provides for. >> supervisor wiener: so in terms of the amendment that's before us requiring that a certain quantity, whatever that quantity is, has to show that they desire to be in the program before the program -- before any commitment to shell is made, is that consistent with the state law? or acceptable under the state law. >> i think it is. we are viewing that as really a condition on the puc's ability to enter the contract with shell. because it provides that, if it there is not a certain base of
6:35 am
customers interested in the program, then the program wouldn't go ahead. and it really has nothing to do with the opt-in, opt-out. >> supervisor wiener: okay. so this is an indication of a desire. this is not -- and maybe this is also a question to the chair, to supervisor farrell. is this -- when this language talks about a desire to be included, indicating a desire to be included in the initial marketing of the program, so it's almost like a survey, as opposed to someone signing on the dotted line, saying i'm in the program. that's how i'm reading this, but i'm curious -- to supervisor chu as well, the authors. >> yes. the construct is to allow the puc -- the commission that approved and created the cca legislation, and the contract that's before us today, allow them -- and the bottom line is after the effective date of this
6:36 am
legislation to have them do -- whether you call it survey or outreach, whatever the phrase is, to understand who might be interested in being mcdonald ma. i have confidence going back to my constituents and everyone on this board to say it's the ones who indicated that they wanted to be marketed to that are going to be part of this program and that to me is an important part of a way to look at -- at -- ake law but make this as acceptable from my point of view to rents as possible. >> supervisor wiener: and so when you combine, again through the chair to the authors of the amendments, when you combine the first two, one is that they have to show that there's sufficient desire, whatever that level is, but number two, once they've done -- let's say they were to do a telephone poll survey, and it reads whatever the threshold is and that's indeterminate
6:37 am
here, they would then be locked into marketing the program in the efficiently phase only to those people who have indicated, via the survey, that they're interested? >> supervisor farrell: that's correct. that's the intention. >> supervisor wiener: so i guess my question, to the puc, if there's flexibility for the commission to determine what that number is -- and i've actually spoken with supervisor farrell about potential language and i have language here to say to get to the number which is viable, which i think is 75,000 or thereabouts, but a number that would give some sort of strong indication that it is likely to be viable, so it could be perhaps a lower number, but something showing that there actually is interest -- i know
6:38 am
you've done surveys in the past so i want to acknowledge that. but in terms of logistics of the program, the timing of you sign the contract, you -- at some point you commit to buying the power from shell, you have to have certain -- you don't want to buy it without knowing how many people you're going to be selling it to. i'm wondering what degree of flexibility there is so that if you did do a survey, let's say a certain number of people, whatever the commission determined that that appropriate number would be, to both do that survey, make that determination, achieve a certain level of interest, and then have that initial phase where you're only doing those folks, and then thereafter, in the next phase you do the broader opt out, which is my understanding of how this would work. and i hope what i said just made sense, but i'm just trying to get a sense from the puc about what is realistic, what's not realistic.
6:39 am
i'm not saying what you -- you know, ideally desire because i know there would probably be a desire to opt out because that's much more straightforward and clean cut. so anyway. >> supervisor, i think i understand what you're talking about here. i guess two parts to it. one, as you've noted, we've done extensive surveying already in terms of polling. and so we are only going and looking at places where we think more than the majority of people want to do it in the first place. so we're not just randomly capturing people in the city, where a majority wouldn't want us. the problem i see with it, as i'm understanding it, is to be able to go out and have people sign up, and i should be able to tell them the price, if i don't know how many people are going to sign up or when, i can't lock in the price 'til i sign the contract with shell. so if i've got to ask them if they want to be in it before i sign the contract i can't tell them what the rate's going to
6:40 am
be. it really harms the ability to have an intelligent conversation with people when you're saying don't know what it is, but do you want it. it is much more straightforward to say this is what it is, here's your chances to make a choice, i do understand the uncomfortableness, but we're going to do a good job of marketing. it would make the program difficult to figure out how to accomplish, how you sell something you don't know what the rate is and you can't do a rate until you do the contract and you can't have a contract until you deliver the power. i don't think it works. >> supervisor wiener: with the currents version where it's a pure opt out because it starts out with a certain pool, you have -- be able to enter into a contract for a specific price with shell. >> right. we do the contract and then start the whole education campaign knowing how much we're going it charge people. >> supervisor wiener: it's not an issue, again through the
6:41 am
chair to the authors, if i can maybe just get a response to that because i think that on the surface, this would be an interesting thing to support but again i very much do not want to do something that could end up -- i know it's not the intent to be a poison pill but could end up being a poison pill. so i'd be interested to know the authors response. >> i'll comment first and appreciate mr. harrington's comments. but from my perspective, we're doing just the opposite. we're making assumptions based upon an opt-out rate from an initial marketing group that we're able to set rates from. so that is a different way of approaching it and putting again the onus on individuals and consumers that we think are going to be the ones paying attention here. and that is exactly the issue that i have with the opt-out program, that we're already opting out low income folks, we're talking about vulnerability of seniors and we talk about people that will be
6:42 am
vulnerable not just the average person not paying attention. it's literally running an excel market here. therefore we're going to be able to lock in energy rates. that to me is not an excuse or reason to go with that approach as opposed to saying even if you have to talk longer with folks and say, hey, we're going to come to you first, we want indication would you be interested in this, we'll come back to you with a rate, they can market to those folks. but just because we're not going to have a rate to talk to them about it is more difficult to me is not reasonable to run an opt out approach to run the program without initial indications of interest. so appreciate that as an absolutely different approach but to me you're getting at the same issue and all the current program is doing is saying the opt-out approach will basically -- again, we're modeling out people that will not let us know they want to opt out of it.
6:43 am
that's not an excuse or reason to go forward in this manner. >> president chiu: supervisor wiener. >> supervisor wiener: i do have other questions for the puc. they're not specific to the amendments. so if we're limiting it to the amendments now i can defer those to the chair. >> president chiu: why don't we continue discussing the amendments? no. go ahead, supervisor wiener, if you had additional questions. >> supervisor wiener: orc. okay. also to the puc. >> president chiu: mr. harrington. >> supervisor wiener: there's been some discussion about ultimately a local build-out being financed in some way by the revenues from the cca, whether it's with cash, or through bonding. and supervisor farrell referred to a concern that it just simply would not generate enough cash to be able to bond around it. so if you could respond to that. >> sure, supervisor.
6:44 am
when you're trying to go out and build a major facility to produce power, the normal thing to do is to go out and borrow the money, borrow enough money to pay your debt service while constructing the facility and then when the facility is put in place, that revenue that then now generates by selling that power pays back the bonds. so that's the process for it. the idea would be that, as we work through the process, by having cca out there, by having a customer base, by having a revenue base, we become believable to bond rating agencies and those that might lend us the money. that's why you need the base but that base subject, on day one starting to pay the debt service. the idea is as we move through and start having ability to do that build-out, if it happens while we're still under contract with shell, we have a contract term this allows us to swap in our power for shells.
6:45 am
we would take money from those customers and instead of giving it to shell we use it to pay off the debt. if it's after the contract is expired we would have new money coming in from customers to pay off the debt. the real issue is can you build a falt that can be sufficiently cheap enough to have this rate structure supported. and i think that the answer is that's something we're still working on but we believe there are places, for example in our watersheds where we own vast quantities of land. that's a much better place to start than a lot of other places anybody else has to start, to be able to build things that can be done for a reasonable price. and we believe there are opportunities where it can work. the other part obviously is that we hope that all of this makes it so that people are using less power and more conservation so we're not having to build as much. we believe there are opportunities on our watersheds particularly but other places, but it's viable. i cannot promise you that 'til
6:46 am
we bring you the pro forma and the forma is the first thing we want to build out and you would have to approve it of course. >> supervisor wiener: sure. i have also a question about, you know, a lot of discussion about what kind of investment is going to be the most impactful in terms of reducing a greenhouse gases, increasing clean energy. and so debate about for example, should we be spending the the money here, or should we just be devoting this to increasing energy efficiency and other solar, other investments that we've made in san francisco, in the past. and then also whether the city should be doing this as opposed to relying on the cpuc which obviously has very broad jurisdiction in terms of quickly moving the dial on renewables. and so if you could comment on that. >> sure. if we could bring up the slide
6:47 am
that's on the screen right now, or get it up on the screen. this is the slide where i was talking about how we have made a lot of purchases. so we've been out and we have done things related to solar on our rooftops at moscone center and other places, on top of sunset reservoir, cogen facilities, a microhydrofacilities. there are a number of ways that we want to go out and generate power. if you look at that, we've committed to spend over $90 million, and those are great programs, but their impact is the equivalent of less than -- greenhouse gases from less than 7,000 homes. here, you're talking about spending very little. and again we're hoping 13 million of the 19 never get spent. and you get an impact 90,000 household on day one if the program goes through. the efficiency of this program
6:48 am
is so much more efficient than any go solar program. the other we were spending 5 million a year and putting solar panels in the neighborhoods of hundreds of homes. over four years we would have spent more than this and would have impacted a come thousand homes and were quite comfortable with doing that apparently. here we're talking about a similar amount of money for 90,000 households. >> supervisor wiener: thank you. >> does that answer? >> president chiu: thank you, supervisor ween. president chiu. >> president chiu: first i want to take a moment and thank everyone in the chamber who has been working for years on this project, from the community advocates to our colleagues to our predecessors and particularly our city staff. thank you. it has been 14 years since cca was first discussed at the board, eight years since the board of supervisors moved forward, a desire for our city to consider this, over a year with this contract on the table.
6:49 am
and from my perspective, i do think it is time for us to move forward. i have supported the concept of cca for the entire time i've been in public life. but we know that there have been previous attempts to move this forward which i was not as comfortable with what we have today. i think there have been a number of changes in recent months and weeks that have made this better. first, i want to highlight what mr. harrington has stated, the fact that we are seeing potentially 10 times efficiency in how we are investing our public dollars and being able to reduce carbon emissions, that is a very notable fact. i think the fact that we are going to be providing choice to consumers, we -- none of us can predict exactly how this program will go but i think it will drive the market, both the private sector as well as what we're doing with city government, to improve our level of efficiencies. i did have concern some months
6:50 am
ago about exactly how we were thinking about the opt-out provisions but i think the changes that have been made, the six months of education that we are going to be asking the puc to consider, the fact that we're talking about a de minimus $5 amount if someone wants to opt out, these are i think very positive changes. and i do want to say, in echoing what supervisor kim had stated before, my major concern in recent weeks have been around low income residents, around monolingual residents, around seniors, certainly at last week's hearing i heard loud and clear from my tenants who live in chinatown their concerns about this. and this is why it's so important that the page and a half of amendments that we have to address these concerns are included. let me state a couple of them that were not mentioned by supervisor kim. the language states that the board of supervisors directs the puc to undertake an extensive public education and outreach campaign in multiple languages
6:51 am
with particular attention to low income communities to ensure that prior to the opt-out process residents are fully aware of the program, its features and its costs, the amendments also state that we strongly urge the puc to eliminate the clean power departure charge for a residential customer that is returning to pg&e services for at least a six month period and that after that time period that the charge be set at no more than a de minimus amount of $5. i wanted to ensure that the puc heard this loud and clear so we drafted language that states that pursuant to our authority under the contractor the board will consider rejecting rates that do not reflect the policies that i described. i want to mention one other clause that says, unless the s sf puc can ensure that low income customers will be offered rates similar to rates near low income customers served by pg&e puc will exclude low income customers in the initial phases of the clean power sf program.
6:52 am
i think this really goes a long way in addressing concerns that we've heard from our low income and monolingual communities. i have a couple of questions for mr. harrington, if i may. and by the way, i want to just thank you for your leadership on this. i know that it was probably just a year ago that you were taking heated for not moving forward the cca program fast enough. i understand in recent weeks you've taken heat for moving the cca program too fast. so thank you for that. i also know this is your last week. and i had an opportunity some months ago to help present a lifetime achievement award to you but you've really done yeoman's work and i think this is a testament to what you have been trying to achieve in government over your decades of service. but my first question is, i heard from constituents of mine in chinatown and throughout the city that, in neighborhoods like the one in the heart of my district, where, as you
6:53 am
indicated, the polling showed that there was very little or less support for this program than in others, i wanted to understand how that neighborhood and others would be treated in the roll out of this program. it's my understanding that because of the marketing that -- the market research that you've done, that that neighborhood and others would not be asked, early on, to take part in this program until we see where it goes. if you could address that, that would be helpful. >> that's exactly correct. we're looking at neighborhoods in the city where we believe more than 50% of the folks would like to be in this program, that does not have that level of support in major portions of your district, including chinatown. they would not be part of this first phase. again, the idea though is it is an opt-out program at some point. but that point is not required under state law to happen in the near future. we would hope that after we had 90,000 happy customers, others will want to sign on and we'll
6:54 am
be able to do an opt-out program over time to bring in people who will want to be with us. we will not go after communities where we think most people don't want this because we don't want to trap anybody. it is of no interest to us to have people who get trapped for a month or two and leave. we want a stable group that wants to be in the program. >> president chiu: i appreciate that and that will be reassuring to residents in chinatown and similar neighborhoods that want to see how this program rolls out in time and to see that it will be successful. i did want to clarify the question to you about your perspective on the amendments that supervisors chu and farrell have indicated. just so i understand, you're stating that for the amendments on page 5 and 16 to the resolution, you have some issues -- you have probably some significant issues to that, but with regards to the ordinance at section 3, you're more comfortable with that. is that correct? >> that's correct, supervisor. >> president chiu: and then
6:55 am
also i understand that the sf puc cannot necessarily immediately include, in clean power sf rates a component to begin recovering the reserves so suggestion has been made that we amend the language for supervisor chu's amendment to state that the sf puc will recommend the inclusion in clean power sf rates, et cetera. is that accurate -- >> yes, supervisor, because we have a rate fairness board. the puc has to then adopt it. this board has the right to veto it. so declaring it will be so will be added on to the regular process seems stronger than you should be, but saying we expect you to do it. absolutely, we will try to. >> president chiu: if i could suggest to our colleagues a quick technical amendment to supervisor chu's language so that the first line states the sf puc will recommend the inclusion in clean power sf rates a component to begin recovering the reserves required for this program, et cetera. and i hope that might be acceptable to the the maker of the amendments.
6:56 am
>> that sounds reasonable. >> president chiu: okay. then with regards to the amendments that supervisor kim and i had worked on, i noticed as we were reading the language i just want to make two quick little technical changes in the third whereas paragraph in the second line, the word through is misspelled and i want to make sure that gets corrected. and the final paragraph the language that was circulated was a little unclear. it should state further resolve, pursuant to its authority under charter section 8 about 125, the board will consider rates in policies not described in this resolution -- i want to make sure that is abundantly clear so hopefully the maker of the amendment will be able to accept that. thank you very much. thank you, mr. harrington. >> supervisor cohen. >> supervisor cohen: mr. harrington, i must applaud
6:57 am
you. with all your years in the city i don't think you've kicked up this much dust. no pun intended. >> are we on the 3:30 item or not? >> supervisor cohen: not yet. you have certainly found a way to exit your public service. and on what i think is a high note. and i want to encourage you, since you are going to be looking at your retirement, you will have some downtime, maybe you will run for office, and maybe you can work out this opt-out issue that we're all in agreement of. you certainly know a lot about it. this particular -- not situation, but this matter, i spent a significant amount of time listening to all sides of perspectives on this issue. i want to thank again all those involved in this process, even those members that have been blogging and writing about it, keeping our public informed. i believe that -- we have a
6:58 am
unique conundrum here and the challenges as we address community choice aggregation. and just to put a little historical context on this conversation, historically, as you know, district 10 has been the home of our city's power plant. and as a result that, we've suffered greatly from environmental impact from dirty power generation and that's the lens that i've been looking through as i begin to figure out where i would be on this item. and i just wanted to highlight that we, as a city, are also encouraged public power in our new development, particularly calling out the example of the hunter's point shipyard, energy that will be provided by puc. so with that said, i'll skip over all my notes because i'm the last to speak and everyone else have stole all my talking points so i'll wrap this up to say i'll be supporting the amendment offered by supervisor kim because i believe they
6:59 am
address a number of concerns particularly those that i believe my constituents have about protecting low income and senior customers, as well as codifying the need -- the language access need that also exists. i'm also willing to support supervisor chu's amendment directing puc to maintain a reasonable reserve for this program. i think that's very fair and measured. while i thank supervisor farrell and chu for their two amendments i believe while it may not be the intention, they significantly -- the other two poemproposals significantly comt the puc ability to -- the program successfully. that's our goal to have a program that's implementable and a smooth execution. with that said i definitely also believe that all san franciscans deserve a choice on where their energy comes from and who will be providing it. i believe this program strikes

September 28, 2012 6:30am-7:00am PDT

TOPIC FREQUENCY Chiu 11, Puc 7, Cca 6, Mr. Harrington 6, Farrell 6, Chu 4, Chinatown 4, Cohen 2, San Francisco 2, Shell 1, City 1, Uncomfortableness 1, Et Cetera 1, Orc 1, Cogen 1, Yeoman 1, Kim 1, Teresa Mueller 1, Avalos 1, Wiener 1
Network SFGTV
Duration 00:30:00
Scanned in San Francisco, CA, USA
Source Comcast Cable
Tuner Channel 89 (615 MHz)
Video Codec mpeg2video
Audio Cocec ac3
Pixel width 528
Pixel height 480
Sponsor Internet Archive
Audio/Visual sound, color